American Crystal Sugar Company is on pace for a record 2012 crop. Company officials say this years crop is breaking records for sugar content.

Apparently the drought conditions of the past summer reduced the amount of water stored in the beets. That could reduce cost of production because there’s less water to be removed in the cooking process that separates the sugar. But a company official says it also slows production because so much sugar is produced per ton of beets that factories can’t process as many tons of beets in a day.

American Crystal recently notified farmers that net per ton payments for last years crop will be $55.67 per ton. That’s significantly lower than the 2010 crop payment of $73 per ton. It’s also much lower than the $74 per ton payment from Minn-Dak Cooperative in Wahpeton,ND.

Company officials say the ongoing lockout of 1,300 union workers, and the use of temporary workers increased the cost of turning last years beets into sugar, but they won’t say how much the lockout cost.

However, they say the cost of production is returning to more normal levels as replacement workers gain experience and training.

American Crystal projects farmers will be paid $65 per ton for the 2012 crop.